Pay Day Loans

A pay day loan is a small advance loan that the borrower takes for the short time period at a high rate of interest. Here the borrower usually signs the post-dated personal cheque in the amount they want to borrow plus the fee in exchange for cash. The lender holds on to that cheque and cashes it on the agreed date, typically the borrower’s next payday. The type of loans is also known as cash advance loan or cheque advance loan.

Pay day loans are often short term advance that can be equipped for making payments for the small, unexpected advances. A payday loan is small and is not meant to be utilized for long term or larger expenses like car or home. The type of loan provides the convenient way to handle the smaller, unplanned expenses. There can be holiday bills, school cost, repairs and similar other unexpected bills that can be easily settled via taking payday loans.  

Apart from that, in exchange for the cash, you take via payday loans, you will be charged a small fee. This fee along with the money borrowed will be due on te next pay day.
Most of the time, the payday loans are paid off in single lump-sum payment but interest only payment. Though there are cases when the same is repayable in installments over the longer period of time. Therefore, there are similar other conditions that can vary as per the individual.

However, Payday loans generally have three important features that remain stagnant in all the conditions. These are -

  • It is a smaller amount loan.
  • The amount of loan plus the fees charge will due on your next payday.
  • You are required to give your lender the access to your checking account or have to sign a cheque in advance that the lender has an option of depositing when the loan comes due.